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While the World Chases Fake Satoshi, 200,000 MtGox Bitcoins Move

[Editor's note: certain language in this post was modified to reduce the implications of money laundering of MtGox bitcoins]

Yesterday, the Bitcoin world woke up to a special report by Newsweek that claimed to reveal the identity of Satoshi Nakamoto, creator of Bitcoin. The report went into extensive details about the man allegedly behind the cryptocurrency, named Dorian Nakamoto, exposing names of his family members and photos of his residence in a deep invasion of privacy.

Many people were astonished at the details shared by journalist Leah McGrath Goodman. Bitcoin Foundation chief scientist Gavin Andresen penned an open letter to Goodman, saying, “I am disappointed you (or your publishers) chose to publish enough personal information that people can easily find Dorian and his family.”

But that’s not the real story here. The real story is what started late in the evening (or early morning in Japan). 200,000 bitcoins started moving around the Blockchain.

Starting at about 9:30PM PT last night, some of the largest ever Bitcoin transactions started appearing on the Blockchain.

The first transaction, consolidated holdings worth 180,000 BTC from 5 addresses into a single address. And another transaction sent 20,000 to the same address, totaling 200,000. Then the bitcoins were sent out from that address and moved into other addresses. a process of “tumbling” began

Tumbling is the act of laundering digital currency by splitting up balances and combining with other sources. Eventually, after a few cycles, it’s not really possible to know where the original bitcoins went.

[Editor's note: we have retracted the implications that this is money laundering. Instead, we are reporting that this is simply a large amount of bitcoins being moved.]

It was a late night for sleuths trying to track these transactions and identify the source. Was it the REAL Satoshi proving his existence? Was it Mark Karpeles, CEO of embattled Bitcoin exchange MtGox? Was it the thieves who reportedly stole 750,000 BTC from MtGox?

Guys, I just followed the transactions of one of the coins. I don’t think it’s Satoshi. It’s Mtgox. Follow the largest transactions in both of these addresses back (these are two out of the 4 inputs for the 180k move). Eventually you will get to the 424242.424242 Mtgox proof of ownership transaction Marky Mark did in 2011.

What if the theories of Mtgox loosing control of it’s stash of Bitcoins by loss of the private keys are right? This means Mark FINALLY just managed to recover a chunk of them that haven’t been moved since 2011 when he moved them to prove ownership. If they had gotten stolen, we wouldn’t be seeing this many bitcoin days destroyed.

These events just go to show that Bitcoin never sleeps! In 24 hours, we went from being told by Newsweek that they had found Satoshi to seeing a message from the REAL Satoshi to witnessing one of the largest movement of bitcoins in history.

What a day!

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5 Responses to While the World Chases Fake Satoshi, 200,000 MtGox Bitcoins Move

Thanks for the comment Bob. There seem to be mixed opinions on this. One view expressed has been that this is MtGox’s standard operations. Another view is that Mark Karpeles is moving his personal holdings. And a third is that the alleged MtGox thieves are tumbling. It will be interesting to find out which is true.